Positive economic outlook
Based on the
revealed country facts, some of the key findings of the Fitch report should be promptly and strategically addressed
It is good to know that, according to one of the most credible and globally recognized statistical rating organizations, Fitch Ratings, Bangladeshs economic outlook is not only stable but its long-term foreign and local currency Issuer Default Ratings or IDRs are also stable.
Besides the globally renowned rating agencies Standard Poors and Moodys, this is the first time Fitch rated Bangladesh after the government allowed its central bank to sign an agreement with the rating agency in February this year. Riddled with back-to-back financial scams and security failures, our financial sector was in a tremendous need to get back to its feet with a practical morale booster and it came at the right time.
However, what needs to be reminded is that sustaining stable success is more challenging than attaining it. To be more specific, the report said that Bangladeshs actual GDP growth at 6.2 per cent over the past five years was strong compared with the median 4 per cent growth rate for its BB category peers. The Country Ceiling is affirmed at BB- and the Short-Term Foreign-Currency IDR at B.
The rating agency, however, expects growth to remain around 6.3% for the financial year ending June 30 of 2015 and FY16. The country, nevertheless, has to ensure that its financial progress is achieved as per the agencys expectations and at the same time remove significant political risks while strengthening the weak health of our banking sector. To combat financial vices together with eliminating political threats is no easy task, so instead of being overwhelmed with joy the government should now be doubly committed to sustaining the continuation of its current credit ratings and aim for a higher position.
Based on the revealed country facts, some of the key findings of the Fitch report should be promptly and strategically addressed. Most significant among these are - the broad range of governance indicators, human development indicators, unanticipated political disorders, high fiscal deficits, poor performance of state-owned banks and limited diversification of export products.
Though Bangladeshs ready-made garment exports and remittance sent by workers abroad continue to support the relatively favourable current account balance levels compared with the peers but the need to explore potentially new export destinations for RMG products has to be taken seriously. The relevant policy makers also have to keep focus on developing stronger skilled workforce for exporting in uncharted countries.
Lastly, it is equally necessary to prioritise finding newer ways of generating revenue to support our current account balances and stop being over-depended on RMG export and remittance. Regular and stable earnings from a range of diversified products and services should be taken into serious considerations. If Bangladesh can financially be rated positive amid a splurge of shortcomings, it can also do more.
